- As we learned thus far, the capitalist class consists of people who own wealth, as well as the means of production in American society. An important question in understanding how this class works is to ask: how does a capitalist remain wealthy? The answer to this question depends largely on understanding the diagram M-C-M’. So, let’s practice by explaining what happens in this diagram in our own words (but basing our ideas on Reading 5.1). Respond to the following question: Explain M-C-M’ to show how capitalists maintain and increase their wealth. (hint: your answer should weave a summary that includes what you reviewed in the self-assessment exercise question 1-7)
The diagram M-C-M, Money-Commodity-Money, explains how capitalist build their wealth. M means money which is the money capitalist use to invest in commodities. C means commodity which the capitalist uses money to purchase commodities like raw materials, labor power, and machinery. M means more money which is the profit capitalist make from selling these commodities at a higher price than their original investments which generates more wealth.
